Customers' Reactions to the Introduction of High-Speed Rail Service

Abstract

Korean Train Express (KTX) of South Korea introduced high-speed commercial rail service on April 1, 2004. It currently has two lines covering 661.1 km (413.2 mi), and its trains achieve speeds of 300 km/h (186 mph). KTX's offering represents the first phase of a scheduled two-phase introduction due to be completed in 2010. This paper documents the service changes of external transportation operators during the first 3 months of KTX operation and details the initial reactions of KTX customers. KTX reduced rail travel time between major cities by almost half. By offering 128 daily services, it increased seat supply by 33% among the major cities and increased revenue by nearly 100% for the Seoul–Busan line, as compared with the same April–June period the previous year. KTX achieved one million passengers in 14 days and 10 million passengers in 142 days of operation. Although these numbers are significant, they represent only about half the demand forecasted. Three major causes of this discrepancy are an inability to provide fully implemented KTX services, low Korean economic activity, and a degraded level of service on conventional passenger rail systems. The expected service level of passengers and the initial marketing strategies used appear to have negatively affected the successful introduction of KTX. However, demand trends show continued increases after the initial response. As a whole, KTX strengthened the viability of Korean rail travel and is expected to contribute to the building of a more balanced national transportation system.